[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
THE EPA RENEWABLE FUEL
STANDARD MANDATE
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY &
SUBCOMMITTEE ON OVERSIGHT
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
July 23, 2015
__________
Serial No. 114-33
__________
Printed for the use of the Committee on Science, Space, and Technology
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://science.house.gov
______
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma EDDIE BERNICE JOHNSON, Texas
F. JAMES SENSENBRENNER, JR., ZOE LOFGREN, California
Wisconsin DANIEL LIPINSKI, Illinois
DANA ROHRABACHER, California DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
MO BROOKS, Alabama ALAN GRAYSON, Florida
RANDY HULTGREN, Illinois AMI BERA, California
BILL POSEY, Florida ELIZABETH H. ESTY, Connecticut
THOMAS MASSIE, Kentucky MARC A. VEASEY, Texas
JIM BRIDENSTINE, Oklahoma KATHERINE M. CLARK, Massachusetts
RANDY K. WEBER, Texas DON S. BEYER, JR., Virginia
BILL JOHNSON, Ohio ED PERLMUTTER, Colorado
JOHN R. MOOLENAAR, Michigan PAUL TONKO, New York
STEVE KNIGHT, California MARK TAKANO, California
BRIAN BABIN, Texas BILL FOSTER, Illinois
BRUCE WESTERMAN, Arkansas
BARBARA COMSTOCK, Virginia
DAN NEWHOUSE, Washington
GARY PALMER, Alabama
BARRY LOUDERMILK, Georgia
RALPH LEE ABRAHAM, Louisiana
------
Subcommittee on Energy
HON. RANDY K. WEBER, Texas, Chair
DANA ROHRABACHER, California ALAN GRAYSON, Florida
RANDY NEUGEBAUER, Texas ERIC SWALWELL, California
MO BROOKS, Alabama MARC A. VEASEY, Texas
RANDY HULTGREN, Illinois DANIEL LIPINSKI, Illinois
THOMAS MASSIE, Kentucky KATHERINE M. CLARK, Massachusetts
STEVE KNIGHT, California ED PERLMUTTER, Colorado
BARBARA COMSTOCK, Virginia EDDIE BERNICE JOHNSON, Texas
BARRY LOUDERMILK, Georgia
LAMAR S. SMITH, Texas
------
Subcommittee on Oversight
HON. BARRY LOUDERMILK, Georgia, Chair
F. JAMES SENSENBRENNER, JR., DON BEYER, Virginia
Wisconsin ALAN GRAYSON, Florida
BILL POSEY, Florida ZOE LOFGREN, California
THOMAS MASSIE, Kentucky EDDIE BERNICE JOHNSON, Texas
BILL JOHNSON, Ohio
DAN NEWHOUSE, Washington
LAMAR S. SMITH, Texas
C O N T E N T S
July 23, 2015
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Randy K. Weber, Chairman,
Subcommittee on Energy, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 9
Written Statement............................................ 10
Statement by Representative Alan Grayson, Ranking Minority
Member, Subcommittee on Energy, Committee on Science, Space,
and Technology, U.S. House of Representatives.................. 10
Written Statement............................................ 11
Statement by Representative Barry Loudermilk, Chairman,
Subcommittee on Oversight, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 12
Written Statement............................................ 13
Witnesses:
Mr. Matt Smorch, Vice President for Strategy and Supply,
CountryMark
Oral Statement............................................... 15
Written Statement............................................ 17
Dr. Jason Hill, Associate Professor of Bioproducts and Biosystems
Engineering, University of Minnesota
Oral Statement............................................... 30
Written Statement............................................ 32
Mr. Chuck Red, Vice President of Fuels Development for Applied
Research Associates, Inc
Oral Statement............................................... 40
Written Statement............................................ 42
Mr. Tim Reid, Director of Engine Design, Mercury Marine
Oral Statement............................................... 45
Written Statement............................................ 48
Discussion....................................................... 53
Appendix I: Answers to Post-Hearing Questions
Dr. Jason Hill, Associate Professor of Bioproducts and Biosystems
Engineering, University of Minnesota........................... 76
Appendix II: Additional Material for the Record
Statement submitted by Representative Eddie Bernice Johnson,
Ranking Member, Committee on Science, Space, and Technology,
U.S. House of Representatives.................................. 88
Statement submitted by Representative Don Beyer, Ranking Minority
Member, Committee on Science, Space, and Technology, U.S. House
of Representatives............................................. 89
Statement submitted by Representative Zoe Lofgren, Committee on
Science, Space, and Technology, U.S. House of Representatives.. 89
Document submitted by Representative Barry Loudermilk, Chairman,
Subcommittee on Oversight, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 90
Documents submitted by Representative Alan Grayson, Ranking
Minority Member, Subcommittee on Energy, Committee on Science,
Space, and Technology, U.S. House of Representatives........... 92
THE EPA RENEWABLE FUEL STANDARD MANDATE
----------
THURSDAY, JULY 23, 2015
House of Representatives,
Subcommittee on Energy &
Subcommittee on Oversight,
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittees met, pursuant to call, at 10:05 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. Randy
Weber [Chairman of the Subcommittee on Energy] presiding.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Weber. The Subcommittee on Energy and Oversight
will come to order.
Without objection, the Chair is authorized to declare
recesses of the Subcommittee at any time.
Welcome to today's hearing titled ``The EPA Renewable Fuel
Standard Mandate.'' I recognize myself for five minutes for an
opening statement.
Good morning, and welcome. This is a Joint Energy and
Oversight Subcommittee hearing examining the Renewable Fuel
Standard, or RFS. Today, we're going to hear from witnesses
with direct experience navigating this complex and outdated
mandate. The RFS was designed to increase the use of renewable
sources of transportation fuels in order to reduce United
States reliance on foreign oil and also reduce vehicle
emissions. But Congress, when it enacted this mandate, based it
on overly ambitious projections about gas consumption,
availability of renewable fuel vehicles and infrastructure,
biorefinery technology, and even the market demand for
renewable fuels. In almost every category the RFS projections
are outdated and do not reflect today's energy market.
The RFS was wrong about gas consumption. Demand for
gasoline is actually falling. The RFS was wrong about the
growth of the renewable fuel industry, particularly in terms of
advanced biofuels and cellulosic fuels. And the RFS was wrong
about the impact incorporating renewable fuels would actually
have on the environment. As one of our witnesses today will
testify, the corn ethanol produced to meet the RFS actually
makes air quality worse and has higher lifecycle emissions than
gasoline.
Today, instead of a transportation fuel supply driven by
consumer demand, we are stuck with our back--pardon the pun--to
the blendwall. Each year, the RFS requires higher volumes of
renewable fuel than our transportation fuel supply can sustain.
Even with EPA approval to use midlevel ethanol blends like E15
and E85 in select vehicles, both, I might add, of which have
significant problems in terms of performance and emissions, the
RFS mandate is still unworkable. This leaves refiners at the
mercy of unreliable annual waivers from the EPA that set the
standard at achievable levels, when EPA even bothers to follow
the law and announce those requirements on time. And American
consumers are stuck with higher prices and less options at the
pump.
The RFS shows that the federal government cannot use
mandates to create a functional industry out of thin air.
Production of renewable fuels has increased, but demand for
fuels with higher blends of ethanol simply does not exist, even
in the most favorable market conditions. While the federal
government has an important role in energy research and
development, including developing efficient transportation fuel
technologies, federal mandates are the wrong approach to
fueling innovation, and let me add, the wrong approach to
innovating fueling, and pardon that pun.
I want to thank our witnesses today for testifying on the
challenges of the RFS in today's energy market, and I look
forward to a discussion about the consequences caused by the
federal government's intervention in the American energy
market. In the case of the RFS, like so many other instances of
federal government mandates, the results are disastrous.
Congress has the opportunity to fix the problems caused by this
outdated and misinformed law, and should advance legislation to
repeal the RFS. We can't afford to hijack economic growth by
continuing with a law that is at odds with reality, and will
raise costs for American consumers.
[The prepared statement of Chairman Weber follows:]
Prepared Statement of Subcommittee on Energy
Chairman Randy K. Weber
Good morning and welcome to today's Joint Energy and Oversight
Subcommittee hearing examining the Renewable Fuel Standard, or RFS.
Today, we will hear from witnesses with direct experience navigating
this complex and outdated mandate.
The RFS was designed to increase the use of renewable sources of
transportation fuels in order to reduce U.S. reliance on foreign oil
and reduce vehicle emissions.
But Congress, when it enacted this mandate, based it on overly
ambitious projections about gas consumption, availability of renewable
fuel vehicles and infrastructure, bio-refinery technology, and the
market demand for renewable fuels. In almost every category, the RFS
projections are outdated and do not reflect today's energy market.
The RFS was wrong about gas consumption--demand for gasoline is
falling. The RFS was wrong about the growth of the renewable fuel
industry, particularly in terms of advanced biofuels and cellulosic
fuels. And the RFS was wrong about the impact incorporating renewable
fuels would have on the environment. As one of our witnesses today will
testify, the corn ethanol produced to meet the RFS makes air quality
worse, and has higher life cycle emissions than gasoline.
Today, instead of a transportation fuel supply driven by consumer
demand, we are stuck with our back to the ``blend wall.'' Each year,
the RFS requires higher volumes of renewable fuel than our
transportation fuel supply can sustain. Even with EPA approval to use
mid-level ethanol blends like E15 and E85 in select vehicles--both of
which have significant problems in terms of performance and emissions--
the RFS mandate is unworkable.
This leaves refiners at the mercy of unreliable annual waivers from
the EPA that set the standard at achievable levels--when EPA even
bothers to follow the law and announce requirements on time. And
American consumers are stuck with higher prices and less options at the
pump.
The RFS shows that the federal government cannot use mandates to
create a functional industry out of thin air. Production of renewable
fuels has increased, but demand for fuels with higher blends of ethanol
simply does not exist, even in the most favorable market conditions.
While the federal government has an important role in energy research
and development, including in developing efficient transportation fuel
technologies, federal mandates are the wrong approach to fueling
innovation.
I want to thank our witnesses today for testifying on the
challenges of the RFS in today's energy market, and I look forward to a
discussion about the consequences caused by the federal government's
intervention in the American energy market. In the case of the RFS,
like so many other instances of federal government mandates, the
results are disastrous.
Congress has the opportunity to fix the problems caused by this
outdated and misinformed law, and should advance legislation to repeal
the RFS. We can't afford to high-jack economic growth by continuing
with a law that is at odds with reality, and will raise costs for
American consumers.
Chairman Weber. And I'd like to recognize Mr. Grayson for
his statement.
Mr. Grayson. Thank you, Chairman Weber and Chairman
Loudermilk, for holding this hearing today.
Currently, the United States consumes more oil than any
other nation in the world: 18.9 million barrels per day. China
is next at only 10.8 million barrels per day. The sheer volume
of America's oil consumption means that we are constantly
spurring global climate change and disruption and its
disastrous consequences. Further, our oil consumption leaves
America heavily dependent on the global market for oil, and
this reliance makes our economy vulnerable. Any significant
supply disruption can have catastrophic effects on our economy.
These concerns, however, can begin to be addressed by the
sustainable use of biofuels and long-term policies like the
Renewable Fuel Standard, which is what we are here to talk
about today. This policy, signed into law twice under President
George W. Bush, requires an increase in the production of
biofuels that can be introduced into the market. The Renewable
Fuel Standard has resulted in greater production of alternative
fuels, and has created a burgeoning market for them.
Breakthrough technologies have emerged, as have innovations and
new infrastructure that are changing the biofuels landscape
every day.
As we will hear from Dr. Hill, over the long term we need
to move away from corn-based ethanol due to its supply
limitations. In the short term, we need to ensure that
efficient, sustainable practices for producing corn-based
ethanol are sufficiently incentivized and enforced. We must
also ensure that the market for these first-generation fuels is
establishing the necessary infrastructure and investments that
will lead to truly sustainable advanced biofuels. The expansion
of the Renewable Fuel Standard in 2007 was designed to do just
that by increasing levels of advanced biofuels through annual
volumetric requirements, requirements that I hope that industry
and the EPA can come to agreement on so that EPA can begin
announcing annually once more.
I look forward to hearing from each of you, our witnesses
on today's panel, and I want to thank you for being here. In
particular though, I'd like to thank Mr. Red for testifying. As
you will hear, Mr. Red is the Vice President of Fuels
Development at Applied Research Associates in Panama City,
Florida. His company is working on breakthrough products that
can be used as drop-in advanced biofuels to replace diesel and
jet fuel. He will note that these types of innovations wouldn't
have been possible without the Renewable Fuel Standard, which I
believe is an important perspective for all of us to hear
today.
While they may not be the sole solution to the glaring
problem of climate disruption, biofuels, especially advanced
biofuels, are a step in the right direction. Without the
Renewable Fuel Standard, we would not even be here discussing
the significant progress made in biofuels over the past decade.
I look forward to what the next decade of biofuels holds in
store, and again, I look forward to hearing from each one of
you this morning.
Thank you, Mr. Chairman. I yield back.
[The prepared statement of Mr. Grayson follows:]
Prepared Statement of Subcommittee on Energy
Minority Ranking Member Alan Grayson
Thank you, Chairman Weber, and Chairman Loudermilk, for holding
this hearing today.
Currently, The United States consumes more oil than any other
nation in the world-- 18.9 million barrels per day. China is the next
closest at 10.8 million barrels per day.
The sheer volume of America's oil use means we are constantly
furthering global climate change and its disastrous effects. Further,
our oil consumption leads America to be heavily dependent on the global
market for oil, and this reliance makes our economy vulnerable. Any
significant supply disruption has the potential to be a catastrophic
economic event.
These concerns, however, can begin to be addressed by the
sustainable use of biofuels and long-term policies like the Renewable
Fuel Standard, which is what we are here to talk about today. This
policy, signed into law twice under President George W. Bush, requires
an increase in the production of biofuels that can be introduced into
the market. The Renewable Fuel Standard has resulted in greater
production of alternative fuels, and has created a burgeoning market
for them. Breakthrough technologies have emerged, as have innovations
and new infrastructure that are changing the biofuels landscape daily.
As we will hear from Dr. Hill, over the long term we will need to
move away from corn-based ethanol due to its supply limitations. In the
short-term, we need to ensure that efficient and sustainable practices
for producing corn-based ethanol are sufficiently incentivized and
enforced. We must also ensure that the market for these first-
generation fuels is establishing the necessary infrastructure and
investments that will lead to truly sustainable advanced biofuels. The
expansion of the Renewable Fuel Standard in 2007 was designed to do
just that by increasing levels of advanced biofuels through annual
volumetric requirements--requirements I am hopeful that industry and
the EPA can come to agreement on and that EPA can begin announcing
annually once more.
I look forward to hearing from each of our witnesses on today's
panel, and again thank you for being here. In particular though, I
would like to thank Mr. Red for testifying. As you will hear,
Mr. Red is the Vice President of Fuels Development at Applied
Research Associates in Panama City, Florida. His company is working on
breakthrough products that can be used as drop-in advanced biofuels to
replace diesel and jet fuel. He will note that these types of
innovations wouldn't have been possible without the Renewable Fuel
Standard, which I believe is an important perspective for us all to
hear today.
Chairman Weber. Thank you, Mr. Grayson.
I now recognize the Chairman of the Subcommittee on
Oversight, Mr. Loudermilk, for his opening statement.
Mr. Loudermilk. Thank you, Mr. Chairman, and good morning
to everyone. I would also like to welcome and thank all of our
witnesses for being here today.
The Renewable Fuel Standard was established in 2005 with
the signing of the Energy Policy Act, and expanded
significantly the Energy Independence and Security Act of 2007.
At that time, gasoline consumption was on the rise, America's
reliance on foreign oil was increasing, and renewable fuels
were just starting to become an option for consumers. In
drafting the Renewable Fuel Standard, Congress projected that
gas prices and consumption would increase, and established
increasing requirements for incorporating renewable fuels into
the transportation fuel supply.
But today's energy market is remarkably different than what
Congress projected in the Renewable Fuel Standard. Gas
consumption has declined, and technology has opened the door
for an abundance of domestic oil and gas. While production of
renewable fuels has increased, and blended fuels are more
widely available to consumers, the refining capacity and market
demand for transportation biofuels projected in the RFS simply
does not exist. Instead of a large increase in in renewable
fuel production to match RFS targets, refiners must navigate a
complex fuel credit system, buying or trading for Renewable
Identification Credits, or RINs, to show that enough biofuels
have been produced to meet RFS requirements. Since biofuels
aren't produced at adequate levels, the EPA must continually
waive the production volumes required in the law, causing
uncertainty for producers and consumers.
As fuels with higher blends of ethanol like E15 and E85 are
introduced into the fuel supply in order to meet the RFS
mandate, the law can even cause confusion for consumers. While
fuels with ethanol content higher than ten percent are approved
for use in newer vehicle models, midlevel ethanol blends can
damage small engines, like lawn mowers, boats and motorcycles,
and are not approved for these uses by the EPA. Adding fuels
with higher blends of ethanol to more gas stations around the
country may help meet the RFS requirements, but it offers
nothing more than a nuisance to regular Americans, as more gas
stations have to sell fuels that they can't even use. And
consumers with vehicles that are compatible with E15 often
choose lower blends of ethanol, or fuel without any biofuels,
due to the lower performance of fuels with a higher percentage
of biofuels.
Simply put, the RFS mandates the sale of fuels with low
demand. The federal government has no business mandating the
sales of fuels that many Americans don't want to buy. And while
the EPA projected significant environmental benefits from an
increased use of biofuels, the fuel efficiency and lifecycle
emissions for biofuels are in direct contrast to EPA's
projections. So the American people are stuck with a law
mandating less-efficient fuels that are more damaging to air
quality than gasoline. It's time for Congress to make a change.
When existing law is unworkable, Congress must listen to
stakeholders, and adjust the law as it is needed.
Our hearing today will examine some of the challenges to
complying with the RFS in today's market. As economic
conditions change, Congress must evaluate the laws it creates
and adjust mandates to reality. I hope that this hearing will
bring to light some of the unintended consequences of the
Renewable Fuel Standard, and provide guidance to lawmakers as
we decide the future of this law.
With that, Mr. Chairman, I yield back the balance of my
time.
[The prepared statement of Mr. Loudermilk follows:]
Prepared Statement of Oversight Subcommittee
Chairman Barry Loudermilk
Good morning everyone. I would also like to welcome and thank all
of our witnesses for being here today.
The Renewable Fuel Standard (RFS) was established in 2005, with the
signing of the Energy Policy Act, and expanded significantly in the
Energy Independence and Security Act of 2007. At that time, gasoline
consumption was on the rise, America's reliance on foreign oil was
increasing, and renewable fuels were just starting to become an option
for consumers. In drafting the RFS, Congress projected that gas prices
and consumption would increase, and established increasing requirements
for incorporating renewable fuels into the transportation fuel supply.
But today's energy market is remarkably different than what
Congress projected in the RFS. Gas consumption has declined, and
technology has opened the door to an abundance of domestic oil and gas.
While production of renewable fuels has increased, and blended fuels
are more widely available to consumers, the refining capacity and
market demand for transportation biofuels projected in the RFS simply
does not exist. Instead of a large increase in renewable fuel
production to match RFS targets, refiners must navigate a complex fuel
credit system, buying or trading for Renewable Identification Credits
or RINs to show that enough biofuels have been produced to meet RFS
requirements. Since biofuels aren't produced at adequate levels, the
EPA must continually waive the production volumes required in the law,
causing uncertainty for producers and consumers.
As fuels with higher blends of ethanol--like E15 and E85--are
introduced into the fuel supply in order to meet the RFS mandate, the
law can even cause confusion for consumers. While fuels with ethanol
content higher than 10% are approved for use in newer vehicle models,
mid-level ethanol blends can damage small engines, like lawnmowers,
boats and motorcycles, and are not approved for these uses by the EPA.
Adding fuels with higher blends of ethanol to more gas stations around
the country may help meet the RFS requirements, but it offers nothing
more than a nuisance to regular Americans, as more gas stations have to
sell fuels that they can't even use. And consumers with vehicles that
are compatible with E15 often choose lower blends of ethanol, or fuel
without any biofuels, due to the lower performance of fuels with a
higher percentage of biofuels. Simply put, the RFS mandates the sale of
fuels with low demand. The federal government has no business mandating
the sales of fuels that many Americans don't want to buy.
And while the EPA projected significant environmental benefits from
an increased use of biofuels, the fuel efficiency and lifecycle
emissions for biofuels are in direct contrast to EPA's projections. So
the American people are stuck with a law mandating less-efficient fuels
that are more damaging to air quality than gasoline.
It's time for Congress to make a change. When existing law is
unworkable, Congress must listen to stakeholders, and adjust the law as
it is needed. Our hearing today will examine some of the challenges to
complying with the RFS in today's market. As economic conditions
change, Congress must evaluate the laws it creates and adjust mandates
to reality. I hope that this hearing will bring to light some of the
unintended consequences of the RFS, and provide guidance to lawmakers
as we decide the future of this law.
Chairman Weber. Thank you, Mr. Loudermilk.
And let me introduce our witnesses. Our first witness today
is Mr. Matthew Storch. Is it Storch? Smorch? Okay. Well, we've
got a typo here. Obviously this printer was fueled by biofuels.
Did I say that out loud? Vice President of Strategy and Supply
for CountryMark, and Mr. Smorch received his bachelor's degree
in Chemical Engineering from Michigan Technological University
and is a graduate of the Hoosier Fellows Program at Indiana
University's Tobias Center for Leadership Excellence. Welcome,
Mr. Smorch.
Our next witness is Dr. Jason Hill, Associate Professor of
Bioproducts and Biosystems Engineering at the University of
Minnesota. Dr. Hill received his bachelor's degree in biology
from Harvard and his Ph.D. in Plant Biological Sciences from
the University of Minnesota. Welcome, Doctor.
Our next witness is Mr. Chuck Red, Vice President of Fuels
Development of Applied Research Associates. By the way, was he
in your district?
Mr. Grayson. No, but he is a Floridian so he'll be voting
for me next year.
Chairman Weber. Okay. All right.
Mr. Red received his bachelor's degree in Electrical
Engineering from the United States Naval Academy and his
master's degree in business management from Troy University.
Welcome, Mr. Red. And he has a Texas connection, I might add.
Our final witness today is Mr. Tim Reid, Director of Engine
Design for Mercury Marine. Mr. Reid received his bachelor's
degree in Mechanical Engineering from University of Iowa and
his master's degree in Mechanical Engineering from University
of Wisconsin. Welcome, Mr. Reid.
I now recognize Mr. Smorch for five minutes to present his
testimony.
TESTIMONY OF MR. MATT SMORCH,
VICE PRESIDENT FOR STRATEGY
AND SUPPLY, COUNTRYMARK
Mr. Smorch. Chairmen, Ranking Members, and Members of the
Subcommittee, thank you for giving me the opportunity to
testify in today's hearing on Renewable Fuel Standard. I'm Matt
Smorch, and I serve as Vice President of Supply and Strategy
for CountryMark Cooperative.
CountryMark is the only farmer-owned integrated oil company
in the United States. The CountryMark refinery uses 100 percent
American crude oil sourced from the Illinois Basin. Even though
we're a small-business refiner, we have a large impact on the
State of Indiana where we supply over 65 percent of the
agricultural market and 50 percent the school districts in the
state. Over 130,000 farmers in Indiana, Michigan, Illinois and
Ohio participate in local cooperatives through which they
benefit from ownership in CountryMark. As a supply cooperative,
CountryMark's mission is to provide those quality products that
our members require for their independent fuel and lubricants
businesses to be successful.
CountryMark started using renewable fuels long before we
were required to do so by the RFS. Being a small refiner,
CountryMark did not become an obligated party until January of
2011. Regardless, we started blending biodiesel in 2006, and in
2008, we started blending ten percent ethanol in our gasoline.
We recognize that there is a place for ethanol in the gasoline
pool.
My testimony focuses on the challenges we have with
increasing RFS mandates over E10. We believe the E10 blendwall
is real. The E10 blendwall was created by the physical
properties of ethanol and the one-pound vapor pressure waiver
provided by the Clean Air Act. This waiver is not available for
higher ethanol blends, which make them uneconomical to produce.
An important assumption in the EPA proposal for 2016 is an
increase in E85 demand and a decreased demand of E0. To meet
EPA's levels would require E85 sales to increase between 31
percent and 684 percent, plus these EPA increases have to
materialize in less than 6 months. Even with Indiana's
passenger fleet having 20 percent flex fuel vehicles and 15
percent of CountryMark-branded stations selling E85,
CountryMark's experience shows E85 is not the answer.
The majority of our gasoline sales are E10, and if you
could show the first slide?
[Slide.]
This is figure 2 from my written testimony, and it shows
the percentage of CountryMark's total gasoline sales for both
E85, which is in the blue, and E0 in the red. It can be seen
that our sales of gasoline without ethanol, the E0, makes up a
higher percentage of our total gasoline sales than E85. We sell
six and a half times more E0 than E85. When seasonally
adjusted, E0 sales are increasing and E85 sales are decreasing.
In fact, one of our members recently converted E85 pumps to E0
service at two locations. Can you show the next slide, please?
[Slide.]
Figure 3 from my written testimony shows an expanded
analysis that we did to compare E10 sales, which are in the red
columns, to E85 sales in the blue columns, for retail stations
that sell both products side by side. This sample of stations
clearly show that when customers have the option to purchase
either E10 or E85, E10 is the preference. On average, E85 sales
only comprise 3-1/2 percent of total station gasoline sales.
With Indiana's infrastructure, we would expect the
percentage of E85 sales would be greater. In 2014, CountryMark
sold a little over a million gallons of E85, which is only 2.7
percent of the amount that we would have expected if customers
were fairly purchasing E85.
Even today, with selling a million gallons of E85 a year
and blending ten percent ethanol in the majority of our
gasoline and almost two percent biodiesel in all our diesel
fuels, CountryMark cannot blend enough renewable fuels to meet
our annual obligation under the RFS. We are a net buyer of
renewable fuel credits, and for 2015, we project those costs to
be over $4 million.
CountryMark will continue to blend ethanol and biodiesel.
We don't support repeal of the RFS because it is now woven into
the fabric of rural America, where we operate. However,
CountryMark supports an RFS, or an amount of ethanol that
market realities support, which is E10. When mandates and
market realities conflict, the market realities should win. Our
experience shows E85 sales on a downward trajectory so we will
continue to face a difficult road in meeting the RFS. Our only
compliance option will be to purchase credits on the market for
our shortfall, which in turn will increase our operating costs,
putting both CountryMark and our farmer owners' investment at
risk.
Thank you.
[The prepared statement of Mr. Smorch follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Weber. Thank you, Mr. Smorch.
Dr. Hill, you're recognized for five minutes.
TESTIMONY OF DR. JASON HILL,
ASSOCIATE PROFESSOR OF BIOPRODUCTS
AND BIOSYSTEMS ENGINEERING,
UNIVERSITY OF MINNESOTA
Mr. Hill. Chairmen, Ranking Members and Members of the
Subcommittee, good morning, and thank you for inviting me to
testify today. I am Jason Hill, Associate Professor of
Bioproducts and Biosystems Engineering at the University of
Minnesota and Resident Fellow of its Institute on the
Environment.
My research focuses on understanding the environmental
effects of the world's energy and food systems, and especially
where they intersect in the growing bioeconomy. My work is
funded by grants from the Department of Energy, USDA, EPA, and
the State of Minnesota.
I am pleased to describe, as you have requested, my ongoing
research into the environmental impacts of biofuels. Much of
the research that I described today was conducted together with
my colleagues Julian Marshall and Chris Tessum. I offer this
testimony entirely on my own behalf.
One of the goals of the Renewable Fuel Standard is to
reduce the negative environmental effects of transportation by
increasing biofuels, but is this an effective approach? Are
biofuels truly cleaner than conventional fuels?
To answer this question, we need to compare these fuels
over their full lifecycle. That is, we need to consider the
damage caused by producing them in addition to burning them.
For gasoline, the lifecycle includes extracting and refining
crude oil, distributing and combusting the gasoline itself. The
lifecycle of corn ethanol involves growing and fermenting
grain, and distilling, distributing, and combusting the ethanol
itself.
Just how important is this lifecycle approach? If we were
to ignore the pollution that is released when producing these
fuels, as many others have done, we would underestimate their
impacts. Take corn ethanol, for instance. Most of the pollution
that contributes to increased fine particulate matter and ozone
levels is emitted when it is produced, not when it is burned.
We focused our analyses on these two pollutants as they cause
the overwhelming majority of health pollution--air pollution
health impacts.
Corn ethanol has higher lifecycle emissions than gasoline
of five major pollutants that contribute to fine particulate
matter and ozone levels. Cellulosic ethanol, which we explored
as derived from corn stover, emits greater amounts of some
pollutants than gasoline and lower amounts of others. It is
also worth noting that using gasoline more efficiently, such as
in a hybrid vehicle reduces emissions of all five pollutants.
How do these emissions affect human health? Well, that
answer depends in part on where these emissions occur and where
they travel, since what we really care about is how many people
breathe dirty air and how much pollution they inhale. We
therefore first estimated how levels of fine particulate matter
and ozone change as a result of producing and using each fuel.
We then calculated the damage to human health and well-being
that would result from these changes in air quality.
We found that producing and using a gallon of gasoline in a
conventional vehicle results in air quality-related health
costs of about 50 cents per gallon. For corn grain ethanol, the
cost is nearly double. This difference is largely due to
ethanol production having greater pollutant emissions than
gasoline production and not due to differences in tailpipe
emissions, which are relatively small. Increased mortality from
ethanol production and use occurs largely in the Midwest and
Eastern United States. For both fuels, nearly all of the health
damage is caused by fine particulate matter rather than by
ozone.
We also found that producing and using a gallon of corn
stover ethanol results in comparable costs to gasoline, again
it's per gallon. Although increased mortality occurs in the
Corn Belt, some areas, air quality improves.
Let's return to our original question of whether the
Renewable Fuel Standard reduces the negative environmental
effects of transportation. Our research shows that, at least
with respect to air quality, that the answer is no. In fact,
because the Renewable Fuel Standard has been met almost
entirely with corn grain ethanol, it makes the air worse. This
finding is consistent with the EPA's own findings, which found
increasing average levels of fine particulate matter and ozone
but up to 245 cases of premature mortality annually.
What role could cellulosic biofuels play in clearing the
air? They have the potential to be no more damaging than
gasoline and perhaps somewhat better. Still, they're not
produced on a large scale and so their effects are less
certain.
The Renewable Fuel Standard will continue to damage air
quality as long as it supports corn grain ethanol regardless of
how the cellulosic biofuel industry develops. Increasing the
efficiency of corn grain ethanol may lessen its environment
impacts, but even dramatic improvements would be unlikely to
make it less damaging than gasoline.
Alternatively, we know that other options are likely to
improve air quality, including increasing vehicle efficiency,
electrifying vehicles with low-emission and renewable sources
of electricity, promoting public transportation, and
redesigning infrastructure. These are the options that we
should be pursuing.
Thank you.
[The prepared statement of Mr. Hill follows:]
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Chairman Weber. Thank you, Dr. Hill.
Mr. Red, you are recognized for five minutes.
TESTIMONY OF MR. CHUCK RED,
VICE PRESIDENT OF FUELS DEVELOPMENT
FOR APPLIED RESEARCH ASSOCIATES, INC
Mr. Red. Mr. Chairman, Ranking Members, thank you for the
opportunity to speak here today. I'm Chuck Red, Vice President
of Fuel Development at Applied Research Associates, known as
ARA. ARA is a science and technology company with a thousand
employee owners. ARA has conducted renewable fuel development
since 2006.
The goal of my testimony today is to give you a snapshot of
the future of second-generation renewable fuels and to discuss
the central rule that the Renewable Fuel Standard plays in
second-generation renewable fuel development, commercialization
and industry growth.
Ethanol and methyl ester biodiesel are considered first-
generation alternative fuels. First-generation fuels are
characterized by small reductions in greenhouse gas emissions
compared to petroleum and are typically blended at low rates
with petroleum, five to ten percent. ARA has focused our
research, development and commercialization efforts on second-
generation alternative fuels. Our feedstocks--what we're
putting into our fuels, what our fuels are made of--are fats,
oils, and greases, many of which are waste products. These
feedstocks can be from waste sources such as brown grease from
water treatment or grease traps, yellow grease/used cooking
oil, animal fats from rendering facilities. Other sources of
feedstocks include algae and industrial/non-food crop oils. One
promising non-food crop oil is Carinata. It's mustard seed.
Carinata is being commercialized by a company called Agrisoma
Biosciences. Crop oils such as Carinata can provide additional
revenue for American farmers by growing it in rotation with the
food crops that they're growing today. They can also serve to
increase the yields of food crops such as wheat by breaking up
the ground so the food crops can grow better. These rotation
crops can also provide a very high-protein meal for animal feed
as well.
ARA has teamed with a world leader in hydroprocessing
technology, Chevron Limits Global, which is a 50/50 joint
venture between Chevron and CBI Lummus for the
commercialization and licensing of our patented 100 percent
replacement renewable fuels production process. Our process is
known as Biofuels ISOCONVERSION. The first phase of our process
water as a catalyst at supercritical, high temperature and high
pressure to quickly convert fats, oils, and greases into a
renewable crude oil. This renewable oil, when hydrotreated, has
the same molecular makeup and boiling range distribution as
petroleum crude. As a result, our process makes a 100 percent
replacement for petroleum crude, allowing jet fuel and diesel
fuel made with our technology to meet petroleum specifications,
without blending with petroleum-based jet or diesel fuel. To
our knowledge, our technology produces the only jet and diesel
fuels being tested by the U.S. military that are 100 percent
replacements for petroleum-based jet fuel.
In 2012, the National Research Council of Canada flew a jet
plane with the first-ever 100 percent biofuels phase of flight
that met all petroleum standards using our jet fuel which we
call ReadiJet. ReadiJet was demonstrated to meet all petroleum
jet fuel standards without blending. Our fuels have been tested
by numerous engine manufacturers including GE, Rolls Royce,
Pratt and Whitney, and Honeywell. Our ReadiJet produces over
less than 50 percent of the emissions and particulate and black
carbon of petroleum jet fuel while reducing lifetime greenhouse
gas emissions by more than 80 percent. Significantly, in jet
engine tests, ReadiJet was more efficient than its petroleum
counterpart, requiring 1.5 percent less fuel to produce the
same amount thrust. ReadiJet and ReadiDiesel fuels are being
certified as 100 percent drop-in replacement fuels by the U.S.
Navy right now. In May, we delivered over 50,000 gallons of
fuel for certification to the U.S. Navy, and we are going to
deliver an additional 90,000 gallons of fuel for certification
to the Navy in fiscal year 2016.
ARA and our partners, Chevron Lummus Global, have cleared
some of the toughest hurdles towards full certification and
adoption of ReadiJet and ReadiDiesel as replacements for
petroleum fuels. I am proud of our team and thankful for all of
the support that we have had from our testing partners and
feedstock partners. We are producing fuels at 100 barrel per
day unit operated by Blue Sun Energy, one of our licensees, at
their facility in St. Joseph, Missouri, now.
Taking new technology to commercial scale is perhaps the
most challenging task of all. We have four commercial licensees
of our Biofuels ISOCONVERSION technology. Two producers have
begun engineering and design for production facilities to
provide renewable jet and diesel fuel for the Navy, airlines,
and other aviation and diesel fleet customers. Each of our
licensees is counting on the Renewable Fuels Standard to
provide a market for renewable jet and diesel fuel to support
the investment of tens of millions of dollars to produce 100
percent drop-in ReadiDiesel, ReadiJet, and other high-value
byproducts, at scale.
Two of our licensees, Aemetis and Blue Sun Energy, are
currently operating commercial plants producing a combined 100
million gallons per year of first-generation renewable fuels
and are looking forward to the RFS providing the power behind
moving towards next-generation fuels.
Thank you.
[The prepared statement of Mr. Red follows:]
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Chairman Weber. Thank you, Mr. Red.
Mr. Reid, you are recognized for five minutes.
TESTIMONY OF MR. TIM REID,
DIRECTOR OF ENGINE DESIGN,
MERCURY MARINE
Mr. Reid. Good morning, Chairmen Weber and Loudermilk, and
Members of the Energy and Oversight Subcommittees. It's a
pleasure to be here this morning to discuss the Renewable Fuel
Standard, E15, and its particular impact on the recreational
boat community. My name is Tim Reid, and I'm the Director of
Engine Design and Development at Merc Marine, a division of
Brunswick Corporation, located in Fond du Lac, Wisconsin.
Mercury Marine has been a member of--manufacturer of
recreational marine engines continuously since 1939, and
currently makes and sells more engines than any other marine
manufacturer in the world.
I am here today to discuss the Renewable Fuel Standard and
E15 fuels on behalf of the National Marine Manufacturers
Association, which represents over 1,500 boat builders, marine
engine and marine accessory manufacturers.
The vast majority of the current production marine engines
are open loop with no capability to correct for oxygenated
fuels. This is especially true for the in-use fleet which is
recognized to be over 40 years old.
The key point to remember when considering ethanol blending
is its effect as an oxygenator. On a typical marine engine, the
additional oxygen makes the fuel burn hotter, and the higher
temperatures can reduce the strength of the metallic
components. Run-quality issues can also occur when the engine
operates leaner than its combustion system limits. In addition,
ethanol can cause compatibility issues with materials in the
fuel systems because of the chemical interaction. A study
conducted by DOE, NREL and Volvo Penta showed that the 4.3-
liter sterndrive engine, when durability tested on E15,
exhibited emissions degradation beyond its certification limit.
In addition, throughout its testing, the engine exhibited poor
starting characteristics during both hot restart and cold-start
conditions.
While I discuss the findings of another E15 study, I'd like
to show you a few photos of the engine components after
endurance testing to illustrate the results. A similar study
conducted by DOE, NREL, and Mercury Marine was completed to
investigate the emissions, performance and durability of
running a 15 percent ethanol blend on outboard marine engines
during 300 hours of wide open throttle endurance testing--a
typical marine engine durability cycle. Three separate engine
families were evaluated. A 9.9-horsepower carbureted four-
stroke engine and a 300-horsepower supercharged electronic
fuel-injected four-stroke engine represented engines currently
in production. A 200-horsepower electronic fuel-injected two-
stroke engine was chosen to represent the legacy products still
used widely today. Only one of the engines tested on E15
completed 300 hours without failure. Test results showed poor
run quality, including misfires at the end of the test, causing
an increase in exhaust emissions. In addition, there were
increased carbon deposits in the engine on the underside of the
pistons and on the ends of the connecting rods, clearly
exhibiting higher operating temperatures. Additionally,
deterioration of the fuel pump gasket was evident, likely due
to material compatibility issues with the fuel blend. This
deterioration of the gasket could lead to fuel pump failure,
disabling the engine. The other two engines tested on E15
catastrophically failed prior to completion of the endurance
test. One engine failed a connecting rod bearing and the other
failed three exhaust valves. Critical engine components like
pistons and connecting rods again documented increased
temperatures due to running on E15.
E15 does not only deteriorate the engine but also puts the
boat fuel systems at risk. While studies have been conducted on
E15 in engines, marine fuel tanks and fuel lines were never
tested, or certified, for use in anything over E10. Prior to
1990, they were not even certified for E10. Deteriorated fuel
lines inside the boats could lead to fuel leakage and a greater
risk of fire and explosion. Marine fuel systems, prior to 2012,
were completely open vented, so E15 would dramatically increase
evaporative emissions as ethanol increases fuel volatility,
especially if the RVP waiver is allowed. E15 creates a higher
probability of phase separation with water in the fuel tank
resulting in a greater chance of disabling the boat engines and
stranding a boater out on open water.
NMMA and the marine industry are not opposed to all ethanol
fuel blends. We feel however, that the RFS is a deeply flawed
legislative mandate which is leading this country in a
direction that will significantly harm not only marine engines,
but other non-road engines and automobiles, and in turn the
consumers of these products. The overwhelming majority of non-
road engines, from chainsaws to weed trimmers to lawn mowers,
operate similarly to recreational marine engines with open loop
fuel systems including a carburetor that is set at the factory
and designed to be, and required by EPA to be, tamper proof.
When the fuel changes in the marketplace and additional
oxygenates are added, such as by going from E10 to E15, engines
run hotter, causing serious durability issues and increased
emissions either in the form of increased nitrogen oxides or
increased hydrocarbons.
The absurdity of it is, by using higher ethanol blends to
achieve the mandates of the RFS, we are actually increasing
emissions and lowering efficiency. Driven by a mandate rather
than sound science, EPA has allowed E15 to be sold in the
marketplace even with documented studies showing durability
issues.
NMMA is not anti-ethanol, but simply opposed to fuel blends
that destroy our engines. For the past five years, NMMA,
Mercury Marine, Honda, and the United States Coast Guard, along
with the U.S. Department of Energy, Argonne National Labs, and
BRP/Evinrude have been proactively working to evaluate a better
alternative to ethanol, both as an oxygenate and a biofuel.
Isobutanol has an energy content closer to that of gasoline,
making it more compatible with existing engines and fuel
systems. Isobutanol is considered an advanced biofuel in the
RFS and can be produced from many different types of biomass
feedstock, including corn. NMMA has conducted tests on a
variety of marine engines and vessels using 16.1 percent
isobutanol by volume, which has similar oxygen content to E10,
avoiding the negative properties of E15 identified above. The
results of our documented and published research thus far
indicate that isobutanol at 16.1 percent volume yields very
similar engine emissions, durability, power and performance as
E10.
NMMA supports Congressman Goodlatte's bill, H.R. 704, and
believes it takes the appropriate steps to amend the Renewable
Fuel Standard by freezing ethanol at E10 and makes other needed
changes to assess our biofuel needs. I strongly urge members of
this Committee to take a serious look at the RFS and move
steadfast in reforming this ill-advised mandate.
I appreciate the opportunity to come before the Committee
today and is happy to answer questions. Thank you.
[The prepared statement of Mr. Reid follows:]
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Chairman Weber. Thank you, Mr. Reid.
I'm going to recognize myself for five minutes. I'm going
to make a couple of comments too. I said to somebody, my dad
owned a gas station growing up that he built in 1958 when I was
but five years old, an Amoco gas station, and he sold Amoco
white gas that was 100 percent octane and could be used in
Coleman lanterns, it was so clean. I owned an air conditioning
company, so I'm extremely aware of the BTU heat content and
energy, so this is very, very interesting to me.
Mr. Smorch, you addressed this in your written testimony
but can you provide your assessment of the demand? I want you
to reiterate CountryMark's sales E0, E10, E15 and E85. You
basically said, did you not, that you guys--you have farmers
that are owners of the company. Is that right?
Mr. Smorch. That is correct.
Chairman Weber. And so--and they raise corn, some of them,
is that right?
Mr. Smorch. That is correct.
Chairman Weber. Would you call that a vested interest?
Mr. Smorch. Yes, very much so.
Chairman Weber. Okay. Can you address your assessment on
the demand for those four categories, E0, 10, 50, and 85? Go
back through that one more time for us, would you?
Mr. Smorch. Sure. Well, first of all, the majority of our
gasoline that we sell is E10. We believe that the blend wall is
a real limit on how much ethanol can go into gasoline. We have
no experience with E15 because E15 is more expensive to produce
from a refiner's standpoint and so we have not gone there.
Plus, there's a lot of other issues with E15 that are too
lengthy to get into.
The one thing to reiterate, though, and this is where the
EPA--what the EPA is looking at for the renewable fuel
standards in '16 is that they're saying that E0 with no ethanol
is going to actually have to decrease, but we're seeing in our
marketplace that E0 is increasing and people are actually
requesting to have more E0 available. At the same time, as I
said in my testimony, E85 sales are decreasing and----
Chairman Weber. Why is that? Why don't they want to buy
E85?
Mr. Smorch. You know, I can't tell whether it's energy
value or not. All I know is that when we look at the same
stations that sell E85 and E10 side by side, people are not
choosing to put E85 in their vehicles.
Chairman Weber. So it's market-driven. And is it true that
E85 actually is not as--puts more emissions in the air and it's
not as fuel-efficient, so in essence, we wind up using more
fuel to go the same distance that we would have had we used
E10?
Mr. Smorch. Yeah. I'm not an expert in the emissions side
of it, but on the energy content of the E85, it's 25 percent
less energy----
Chairman Weber. Well----
Mr. Smorch. --than E10.
Chairman Weber. --so you would use, for example, to go--you
would use 25--say 100 gallons or 125 gallons--I'm just thinking
if you're going to have to use 125 gallons of the E85 as
opposed to the 100 gallons, it's going to put more emissions in
the air while you're using that extra 25 gallons.
In your experience, do--well, let me do this. Does it
surprise you that the EPA doesn't even meet the requirements
for coming out with a new standard, although they're by law?
Would you guys be fined if you didn't meet the new requirements
by law?
Mr. Smorch. Well, we would have--yeah, we would be fined.
Chairman Weber. You would be fined but--EPA did not get
fined when they didn't meet the requirement of law to come out
with that standard, did they?
Mr. Smorch. Well, not that I'm aware of.
Chairman Weber. Oh, I'm aware of it.
Let me go to all witnesses very quickly. Ten years ago next
month President Bush signed into law an energy bill that
included the renewable fuel standard. The RFS came with lots of
promises, including being the answer to achieving energy
independence, cleaner air, consumer savings, and even defeating
terrorism. Based on your research and experiences, has RFS
achieved these promised benefits?
And it's two parts of a question. Has it achieved these
benefits--let me go back--energy independence, clean air,
consumer savings, and defeating terrorism. It sounds like we've
got some negotiation with Iran going on that terrorism hadn't
been defeated. Based on your research and your experience, have
those four things occurred, Mr. Smorch?
Mr. Smorch. I would say at this point they probably have
not occurred.
Chairman Weber. Dr. Hill?
Mr. Hill. No, they have not.
Chairman Weber. Mr. Red?
Mr. Red. We have not reached that goal. We're working
towards that.
Chairman Weber. Okay. Mr. Reid?
Mr. Reid. My opinion would be no.
Chairman Weber. Would be no. So one of you asked isn't it
time for Congress, and indeed I said it is, to reevaluate the
law. So would y'all agree with that? Just a simple yes or no.
Isn't it time for Congress to reevaluate that law, Mr. Smorch?
Mr. Smorch. Yes, it is.
Chairman Weber. Dr. Hill?
Mr. Hill. Yes.
Chairman Weber. Mr. Red?
Mr. Red. I'm an expert on renewable fuel generation and
technology so I'm not going to comment on that one.
Chairman Weber. You're not going to comment on that one?
You're taking the Fifth Amendment. Is that E-Fifth, E5?
Mr. Perlmutter. Point of order. The witnessess have right.
Chairman Weber. Okay. I didn't know there was order here
but thank you for pointing that out.
Mr. Reid?
Mr. Reid. Per my testimony, yes.
Chairman Weber. Yeah, thank you. Okay. Well, I appreciate
that and I am going to yield to the Ranking Member for
questions.
Mr. Grayson. Thank you, Mr. Chairman.
Brazil, a Third World country, has had an ethanol
requirement since 1931, and for the past 40 years Brazil has
had a requirement of E10 or greater. For the past 20 years,
it's had a requirement in the neighborhood of E25. Can anyone
explain to me why Brazil can do it and we can't? Let's start
with you, Mr. Smorch.
Mr. Smorch. I can't answer that question. I'm not an expert
in Brazil and how the interaction between their gasoline market
goes.
Mr. Grayson. Well, Mr. Reid, correct me if I'm wrong but
Brazil has boats, right?
Mr. Reid. Yes, they do.
Mr. Grayson. Okay. And lawnmowers? They have lawnmowers?
Mr. Reid. Yes.
Mr. Grayson. Chainsaws?
Mr. Reid. I believe so.
Mr. Grayson. So why can Brazil do it and we can't?
Mr. Reid. We know within our marine engines, first of all,
when our marine engines go there, we have no warranty because
of the fuel requirements, so we drop the warranty. They are not
covered under our mercury warranty.
The other part of it is we believe they're locally modified
to run on this fuel and the beauty----
Mr. Grayson. Okay. All right. Stop right there.
Mr. Reid. All right.
Mr. Grayson. Locally modified to run on that fuel. So
that's how they deal with it. They get that done. Why couldn't
we do the same thing?
Mr. Reid. The key thing is that then they have a
renewable--a consistent fuel source that every day they go to
the fuel pumps they're getting E20.
Mr. Grayson. Which is what we should have here, right?
Mr. Reid. The challenge there is that our customers or our
consumers of our marine engines can pull up to the gas pump and
get anything from E0 to E85 and their chance of misfueling
their boat is what's critical. So when it gets down to one
choice, they obviously have to pick the one fuel. So our
concern----
Mr. Grayson. So if the renewable fuel standards were--could
be in effect, then you wouldn't have that problem anymore,
right?
Mr. Reid. The challenge is is the variability of the fuel.
You know, there's more than enough capability in the marine
industry and different industries to dial in the engines to the
fuel. The key thing is the legacy fleet that's out there is
another part of that equation. We can produce going forward
just like a number of industries changed to adapt to the local
fuel or the consistent fuel.
Mr. Grayson. Right. And it's probably better to start now
than start later; that just makes the problem worse, right?
Mr. Reid. The issue----
Mr. Grayson. But let me give somebody else a chance. Mr.
Red, is there any reason why Brazil can do it and the United
States can't?
Mr. Red. I can't think of it technology-wise if, you know--
--
Mr. Grayson. They're not super geniuses? They have no
special laws of physics in Brazil, nothing like that?
Mr. Red. It's probably worth another look.
Mr. Grayson. All right. What about you, Dr. Hill? Any
reason why Brazil can do it, has been doing it for the past 80
years, and we can't?
Mr. Hill. So there have actually been some recent studies
that have shown that the increased use of ethanol in Brazil has
worsened their air quality.
Mr. Grayson. Ah. Well, we'll get to that shortly but you
have to answer my question. My question is is there any reason
why Brazil can have an E25 standard for 20 years now and the
United States can't?
Mr. Hill. I'm not an expert on engine technologies, but I
do know Brazil, even though they have 2/3 the population of the
United States, uses I believe about a tenth of the fuel that we
use----
Mr. Grayson. Sounds good to me.
Mr. Hill. --overall so the----
Mr. Grayson. Dr. Hill, now that we're on your subject here,
are you aware of scholarly work, research in the industry that
actually contradicts your conclusions?
Mr. Hill. No, I am not.
Mr. Grayson. Okay. Well, let's talk about that. The
Renewable Fuel Association has been critical of your
perspective on--oh, now you're nodding so maybe you are aware
of this.
Mr. Hill. That's not--they don't do research.
Mr. Grayson. But let's answer my question, okay? In 2014
they released an analysis that raised questions about your
paper--I see you nodding again--saying your conclusions ``stand
at odds''--I'm quoting now--``with real-world data showing
decreases in ozone and PM2.5 concentrations'' and that there's
a ``substantial body of evidence''--I see you nodding some
more--``proving that ethanol reduces both exhaust hydrocarbons
and carbon monoxide emissions and thus can help to reduce the
formation of ground-level ozone.'' Now this rings a bell?
Mr. Hill. Well, I was always aware of that but I did not
consider that in any way scholarly research. I'm happy to
answer both of those points. So the first one, correlation----
Mr. Grayson. Let's start with my question. My question is
isn't it fair to say that these studies contradict your
conclusions?
Mr. Hill. Those are not studies. They--it is simply--that
is----
Mr. Grayson. Results----
Mr. Hill. Renewable----
Mr. Grayson. What do you want to call them?
Mr. Hill. Renewable Fuel----
Mr. Grayson. I mean now you're quibbling, aren't you?
Mr. Hill. No, no, no. Renewable Fuel Association is a
lobbying group so what they did is they showed--and I'm very
aware of their--what they put out in relation to our work--
they----
Mr. Grayson. Well, let's talk about----
Mr. Hill. They conflated the--okay.
Mr. Grayson. I have to interrupt you because time is short
here. The Department of Energy has a model. You agree with me--
--
Mr. Hill. Yes.
Mr. Grayson. --the Department of Energy is not a lobbying
group--that is considered to be very good for lifecycle
emissions analysis and it highlights that the most recent model
from the Department of Energy shows no increase in PM2.5
emissions or other criteria pollutants when gasoline is ten
percent corn ethanol. That's contradicting your study and
that's the Department of Energy, a rather authoritative
source----
Mr. Hill. We actually used----
Mr. Grayson. --isn't it?
Mr. Hill. --Department of Energy results in our study----
Mr. Grayson. Um-hum.
Mr. Hill. --to come up with our analysis. That is tailpipe
emissions.
Mr. Grayson. Um-hum.
Mr. Hill. Lifecycle emissions for corn ethanol are higher
than for gasoline when you look at the whole lifecycle. That's
what my testimony was about. Regarding the other point,
correlation doesn't not equal causation. Ozone and PM levels
have dropped but that's been due to other interventions in our
national infrastructure, not due to the increased use of
ethanol.
Mr. Grayson. All right. Well, Mr. Chairman, I'm well aware
of information that contradicts Dr. Hill's testimony. I'd like
permission to put that in the record.
Chairman Weber. Without objection.
[The information appears in Appendix II]
Chairman Weber. Does the gentleman yield back?
Mr. Grayson. Yes, I do.
Chairman Weber. Thank you.
Mr. Loudermilk, you're recognized.
Mr. Loudermilk. Thank you, Mr. Chairman. This is very
intriguing.
May I add that there are some significant differences
between the United States and Brazil, and I think one of those
is called freedom and consumer choice, which I think is one of
the reasons why we have far exceeded a lot of other countries
like Brazil and in fact that's what our founders envisioned in
this nation was to let the people be ultimately in control of
their choices.
I'm sure that as we study food products, as I'm often
reminded in my home that my choices of food are probably not
the best for my health. We could take the Brazil model with
food and have the government dictate that we all eat a spinach
salad every meal, but as----
Chairman Weber. Let's not go too far now.
Mr. Loudermilk. --the American people--I don't think the
American people are going to go that route.
Second of all, I was very intrigued in the answers that you
weren't able to give and--because I'm very interested in facts
here. I'm not trying to justify a wrong that may have already
occurred. I would really like to hear what your response would
have been to the gentleman from Florida if you were allowed to
continue on with your response to the report--I may add--or
define what the lobbying group came up with versus your
research.
Mr. Hill. Thank you for the additional time to talk about
this. We've long experienced interactions with the Renewable
Fuel Association. In fact, one time they put out a report, a
response to a previous paper of mine, that they actually copied
3/4 of it from something that had been published ten years
earlier. So the--with regard to that particular response to our
work in December, they put a graph that showed decreasing ozone
levels and PM levels over time in the United States, and also
showed increase in ozone levels. Well, you can also show all
sorts of other correlations that exist. In fact, I encourage
people to go to spuriouscorrelations.com. I believe if you
Google it, it's on there. It shows ridiculous things,
increasing levels of pirates and changes in dietary patterns,
for instance. This is the same level of ridiculousness that was
involved in this correlation that Renewable Fuel Association
showed in that report.
So--and the other point is that the emissions of PM are
very similar when you burn ethanol compared to gasoline. They
might even be slightly lower in some cases. But that doesn't
change all the emissions that occur as a result of producing
the fuels. And in producing the fuels, the emissions are much
higher for ethanol than they are for gasoline. So tailpipe,
about the same. Producing the fuel is much higher for ethanol,
in some much worse for ethanol than for gasoline.
Mr. Loudermilk. So put this in layman terms. You're looking
at the lifecycle from when the corn seed is put in the ground
to where it's burned and the emissions come out the tailpipe.
The pollutants are greater in that entire lifecycle as compared
to the entire lifecycle from when we drill and we extract the
oil, we either import the oil or domestically refine it, until
the emissions come out of the tailpipe. What I'm understanding
you say is there are more air pollutants in that lifecycle with
ethanol-based fuel than it is pure gasoline?
Mr. Hill. Ethanol from corn, yes, and for pollutants that
affect fine particulate matter formation in the atmosphere and
ozone formation, yes.
Mr. Loudermilk. Okay. To err is human, to forgive is
divine, but the definition of insanity is once you err, you
keep erring over and over and over again. We may have had a
great idea with the renewable fuel standards. It sparked
innovation to go down a path. Mr. Smorch, in your--the realm
you're in is very interesting because I'm sure--and you can
answer this--your suppliers benefitted financially from a
renewable fuel standard because it created a market that didn't
exist, is that true?
Mr. Smorch. Our customers, yes. I mean we----
Mr. Loudermilk. Yeah.
Mr. Smorch. --purchase oil and we refine it.
Mr. Loudermilk. Right. But to the point now because it
hasn't gone the path that we expected it to go, it now is--you
have a depleting market, is that right? You're being forced to
produce something that you can't sell, at least in a percentage
that your market demands?
Mr. Smorch. Yes. We are comfortable with selling gasoline
that has ten percent ethanol in it, but once you get the higher
percentages of ethanol, it appears that the customer does not
want that product.
Mr. Loudermilk. Okay. And, Dr. Hill, obviously you have no
financial advantage one way or the other whether it produces a
market or not. You're purely coming from just pure scientific
research?
Mr. Hill. My work has not been sponsored by anybody except
for federal competitive grants.
Mr. Loudermilk. Okay. This is very intriguing but I see
that I'm out of time so, Mr. Chairman, I'll yield back.
Chairman Weber. I thank the gentleman.
And the Chair recognizes the gentleman from California.
Mr. Swalwell. Thank you, Chairman.
And just to clear the record and clear Brazil, it is
neither a Third-World country or a dictatorship. Just didn't
think we'd have to start the hearing clearing that up. But for
Mr. Reid, Mr. Reid, do you agree that only about one percent of
the fuel consumption in the United States is for recreational
boats?
Mr. Reid. I'm not aware of the data behind that. I'm really
here to testify on the effects of E15.
Mr. Swalwell. Okay. The data I'm familiar with is that in
2012 and every year since that, recreational boats consumed
about 1.6 billion gallons of gas, which represents about one
percent of the fuel consumption and that it's been pretty
typical since then. So would you agree that, you know, to
condemn an entire law or standard based on a population that is
only one percent of fuel consumption may be going too far or
perhaps throwing the baby out with the bathwater?
Mr. Reid. Well, from my perspective, you know, the study
was conducted on E15 to show there were detrimental results to
that. I think the key thing there is we're looking at our
legacy fleet that's recognized to be 40 years old. Of that,
there's 12 million boaters--boats in the United States. So
while it may be small in percentile, it's affecting many
people.
Mr. Swalwell. Sure. But most boaters would have the option
of using E10, isn't that right? If they're at a fuel station,
there's E15. There's supposed to be E10, which would not cause
the problems you've described.
Mr. Reid. Correct. E10 will not cause issues. Our engines
are certified and validated on E10.
Mr. Swalwell. So are you familiar with stations that are
only serving E15 and not giving the E10 option to boaters?
Mr. Reid. I'm not aware of the distribution of one
particular fuel only at a gas station. I think there is a
distribution of fuel, E0, E10, E15, E85. I think the key thing
there is the education and knowledge when a person pulls up to
the pump, are they selecting the proper grade? Are they
grabbing a hose that's available? Are they looking at the
price? That's not really my technical background or my
background, but the key thing is that they select the correct
one. Misfueling is definitely high potential.
Mr. Swalwell. So you would agree, though, that maybe
perhaps instead of changing the fuel standards an education
campaign from your industry and perhaps even from government
may also assist in correcting this issue?
Mr. Reid. I'm not an expert in the social and the ability
to educate consumers to that level of detail, but what I can
tell you is E15 in boat engines will cause issues.
Mr. Swalwell. Sure. Mr. Red, as we've--and thank you to
each of you for appearing today. As we've heard today, one of
the central concerns regarding ethanol blends is the blend wall
concept and how to advance drop-in biofuels get over this
purported hurdle? And if you could speak to how your company's
work advances the prospective of integrating biofuels into the
transportation fuel supply.
Mr. Red. Thank you. We have been working on this for nine
years, and our focus from the very beginning was how can we do
things without subsidies? How can we, you know, bring biofuels
to a point where it can stand on its own, where it can
contribute, you know, to lower greenhouse gas emissions, lower
emissions, and some energy security to our country by not--and
doing it without subsidies. Standing up a new technology,
standing up new infrastructure against an industry that's been
here for 100 years plus is challenging and an industry that
controls the distribution and sale of fuels, you know, that is
what we're up against with our technology. And so what our
focus has been on taking low-cost feedstocks, converting them
into 100 percent drop-in fuels and then providing that
technology to folks who are interesting in making renewable
fuels.
Mr. Swalwell. And just a yes or no for each witness because
there is not a representative here from the biofuels industry
as far as the additives side, do you think it would have been
more helpful to also hear from that perspective, Mr. Smorch?
Mr. Smorch. I thought Mr. Red is from the biofuels.
Mr. Swalwell. Well, he's on the drop-in side, right, Mr.
Red?
Mr. Red. Yeah. We're not doing ethanol or biodiesel. We're
doing 100 percent drop-ins that look and perform like
petroleum.
Mr. Swalwell. And there's a difference between drop-in and
additive, right?
Mr. Red. One hundred percent drop-in fuel can be used
without blending with petroleum and has the same performance
or--you know, as petroleum so, you know, when you look at the
additives, ethanol is not burned at 100 percent for a reason.
You know, biodiesel is not burned at 100 percent for a reason.
Our fuels are quite different from those.
Mr. Swalwell. Do you think it would have been helpful, Dr.
Hill, to hear from the ethanol industry?
Mr. Hill. Not at all.
Mr. Swalwell. Okay. Hey, we appreciate honesty here. And,
Mr. Reid?
Mr. Reid. My perspective is based on our test data. If you,
the Committee, needed to have that perspective, then that would
have been beneficial. It's really up to you.
Mr. Swalwell. Great. Thank you. And thank you to our
witnesses, and I yield back.
Chairman Weber. I thank the gentleman for yielding back. I
recognize the gentleman from Kentucky, Mr. Massie.
Mr. Massie. Thank you, Mr. Chairman.
So in my district, consumers, at least anecdotally, are
relating that they get less gas mileage from blended fuels than
they do from petroleum that's not blended with ethanol. And
what I want to clear up here today, because as recently as last
week, a lobbyist for the ethanol industry tried to convince me
that mileage was the same whether you had pure petroleum-based
products or one that was blended with ethanol. So I'd like to
ask each of the four of you, is the mileage the same with--from
a gallon of gasoline versus a gallon of gasoline that's
blended--been blended ten percent or 85 percent or 15 percent
with ethanol? Mr. Smorch?
Mr. Smorch. Ethanol only has about 67 percent of the energy
content per gallon than a pure petroleum gasoline, so when you
have a blended gasoline with gasoline and ethanol, the mileage
will decrease as more ethanol is included in that blend.
Mr. Massie. And, Dr. Hill?
Mr. Hill. I'm not an expert in that area but it is a
complicated question because you also have an oxygen boost with
ethanol and so at some levels in some vehicle technologies it--
you may have the same mileage, you may also have a drop in
other cases. If you blend at high levels like E85, you will of
course require more fuel to go the same distance but you'll
also pay less at the pump.
Mr. Massie. Mr. Red.
Mr. Red. I'm not an expert in ethanol but I'll tell you our
fuels will meet or exceed petroleum.
Mr. Massie. Mr. Reid?
Mr. Reid. In the marine industry you will get worse fuel
economy with E10.
Mr. Massie. And, Mr. Reid, you're the Director of Engine
Design at Mercury Marine. I was hoping maybe you could explain
to me--this is a little bit out of your field but related to
engine design--why are the motorcyclists in my district so
opposed to ethanol blends?
Mr. Reid. I would only be speculating if I answered that
question.
Mr. Massie. Well, please do in the context of their engines
since you're Director of Engine Design.
Mr. Reid. Well, I believe that's very similar to the
prospective on the marine side. People I've seen on forums
discussing with customers directly they will go to particular
marinas that have what's called the REC-90. It's a 90 octane,
zero ethanol fuel. I think they know--they have more comfort
level with a zero ethanol fuel, that it'll burn, it'll have
less likelihood of having interaction in their fuel system,
less potential for water separation in their fuel system and
the issues associated with that. I can only assume the
motorcycle people think the same.
Mr. Massie. Mr. Smorch, again, I received some information
from lobbyists last week that perhaps the reason ethanol wasn't
selling well at the fuel stations was there was some sort of
conspiracy among the oil and petroleum manufacturers and
distributors that they didn't want to provide it to customers,
yet I see signs in my district at the gas pumps that say ``our
gas is ethanol-free.'' Now, that seems to be a consumer
question that comes up. Can you speak to consumer demand for
ethanol and whether this is a conspiracy of the petroleum
retailers?
Mr. Smorch. Well, I can speak to our experience. We're a
supply co-operative, and what we do is we sell wholesale to our
member companies and they're the ones that actually retail the
product. We sell and we supply to them what they ask us to
supply, whether it's gasoline with E10. We supply E85 to them.
We supply E0 to them. So we're not conspiring to not allow
ethanol or higher ethanol blends to be out in the marketplace.
But when you look at the data that we have and our experience,
higher ethanol blends like E85, they just do not sell as much
as an E0 or an E10 would.
Mr. Massie. Thank you very much.
Dr. Hill, in your estimation should corn ethanol be
classified as a ``green'' fuel given its environmental impact?
Mr. Hill. The only thing green about it is the plant that
it comes from.
Mr. Massie. Now, your findings would seem to find some
support in a study released last year that ozone levels in
Brazil actually have increased as ethanol usage did. Is that
true?
Mr. Hill. I will need to go back and review that if that
study was released last year not, but I believe that studies
have come out that have shown worsening air quality in Brazil
as the use of ethanol increased.
Mr. Massie. And does the EPA's Regulatory Impact Analysis
reach similar conclusions that you do? I understand that EPA's
triennial review, in that, they also found diminished air
quality, water quality, biodiversity, and a number of other
environmental impacts as a result of increased corn ethanol
increased.
Mr. Hill. I was on the review panel for the triennial
review, and the triennial review said that biofuels could be
produced in ways that are better than gasoline and it said that
they could be produced in ways that are worse than gasoline. It
didn't specify whether the fuels produced from RFS2 are
necessarily better or worse than gasoline or diesel.
Mr. Massie. Thank you very much. I yield back.
Chairman Weber. I thank the gentleman and recognize the
gentleman from Colorado, Mr. Perlmutter.
Mr. Perlmutter. Thanks, Mr. Chair. And to the panel, thank
you for being here today. I don't really have a dog in this
fight. I represent the suburbs of Denver. And, you know, Mr.
Massie asked some questions about gas mileage. I think from my
point of view we've seen that blended fuels have a little less
mileage per gallon than straight petroleum but I'm not coming
at it so much from the emissions standpoint as just a menu of
fuels to be available to Americans, whether it's a blended fuel
or a straight replacement or electricity or hydrogen fusion. I
mean all of these would have some impact on how you make an
engine, right?
Mr. Reid. Absolutely.
Mr. Perlmutter. I mean each kind of these fuels you may
have to alter the engines. You guys would have to build it,
whether it's boats or cars or motorcycles, right?
Mr. Reid. Other than if they're classified as drop-in.
Mr. Perlmutter. Okay. So drop-in is what Mr. Red's company
makes and that's just a complete replacement equal to equal?
Mr. Reid. Correct.
Mr. Perlmutter. Or better in your estimation, sir, Mr. Red.
Mr. Red. Emissions-wise it certainly is.
Mr. Perlmutter. Okay. So, Dr. Hill, I would assume, as a
scientist, you wouldn't have any opposition to the fact that
we're looking for and this country is trying out different
kinds of fuels, would you?
Mr. Hill. Trying out fuels is a wonderful thing but you
need to look very carefully whether you go whole hog into them.
And I'll give you an example of this. Right now, we produce
about 15 billion gallons a year of ethanol. If we were to
increase our fuel efficiency of our fleet by average by one
mile per gallon, we do as much for reducing petroleum use as
producing that 15 billion gallons of fuel. So the direction you
want to go is fuel efficiency and conservation and
electrification rather than necessarily trying out all these
fuels over the whole fleet. For some applications like
aerospace, yes, that is a good option to consider because we
really don't have other options.
Mr. Perlmutter. And that's the point. We want to have
options. You don't want to be so married or so wedded to a
particular fuel that if in fact there's some kind of embargo,
all of a sudden you're in trouble until we come up with
something else. And so from my point of view I want to have a
menu of opportunities.
I think politically there has been a push for corn-based
types of fuels, and in Colorado we have some corn that's not a
main product for us. I would think Minnesota probably has a
pretty good corn crop.
Mr. Hill. A very healthy crop.
Mr. Perlmutter. You know, and Iowa and sort of the center
of the country so there's been a lot of politics driving this,
as well as potentially maybe some emissions help. You know,
certainly having an additional type of fuel to keep us as
independent as possible and not subject to, you know, some kind
of dictator's whim someplace on the planet.
So do--you know, what I do have in my district is a
National Renewable Energy lab, which is looking at cellulosic
and all kinds of different fuels from the fusion we talked
about to better ways to burn the gasoline to whatever. So, Mr.
Smorch, I mean you don't have a problem with us as a general
proposition--and I appreciate Dr. Hill's point of view. You
don't want to go whole hog if you don't have to. You know, if--
but you don't have a problem with us testing out different
kinds of fuels, do you?
Mr. Smorch. No. From a testing standpoint there's no
problem with that, but when the realities of the marketplace
and getting it to the end consumer, that is where the challenge
is.
Mr. Perlmutter. So at the gas station, though, if we're
providing different kinds of fuels, then you've got to come up
with different kinds of gas pumps, right, or some type of
delivery system for a particular type of fuel?
Mr. Smorch. Correct.
Mr. Perlmutter. So if we're doing natural gas, we've got to
have some kind of natural gas. If we're going to do
electricity, somebody's got to have a good plug-in. Likewise,
if we're doing E85, it's got to be a certain kind of mix. If
we're doing a drop-in, and I don't know, Mr. Red, do you have
pumps in Colorado that are your particular type of fuel?
Mr. Red. We are just moving to commercial scale. We have
four licensees. Two of them are in engineering now and building
full-scale commercial facilities, so we are not at commercial
scale yet.
Mr. Perlmutter. Mr. Reid, I would expect that as ideas or
these different fuels come up, your company, you know, plays
with modifying its engines from time to time just to make sure
you could do it if you had to?
Mr. Reid. Through the DOE funding we've looked at the 15.
We've done that study in addition to the isobutanol study with
the U.S. Coast Guard. So as they firm up and have support, we
will get involved to understand their effect on the engine and
then deal with the data that is supported within that study.
Mr. Perlmutter. Okay. Thank you. And thanks, Mr. Chair.
I'll yield back.
Chairman Weber. I thank the gentleman.
Mr. Knight, you are recognized for five minutes.
Mr. Knight. I appreciate the stop in the Brazil back and
forth, Mr. Perlmutter. Thank you for doing that because I was
going to not make a Brazil comment so that we could stop on
that.
Mr. Smorch, I'd like a couple answers. A couple of the
questions that went back and forth were on what the customer
wants, and I think one of the last questions was testing is
okay. Give me an idea on testing on new petroleum, new ways of
fueling our cars is okay, but when the government gets involved
and says now we've got to do this; we are going to push this
type of fuel source, give us an idea of the difference there
between testing new fuels and actually making the customer have
that choice or making the customer do this.
Mr. Smorch. I mean doing--CountryMark is not involved with
doing a lot of research and development on fuels, but going
in--for independent people to go and find a different fuel
source, that's fine. The reality of it is is that when you put
in--just take gasoline. Gasoline is--everybody thinks that it's
gasoline and ethanol. Really there's 30 different things that
go into gasoline. It's a complex recipe. And what we do as
refiners is we're trying to optimize what that recipe looks
like. So if there's other economical streams that could get
into gasoline, that'd be great because we--that's what we're
trying to do to be able to provide the customer the best fuel
and do it economically.
Mr. Knight. Okay. So now let me go to Mr. Reid. You showed
us this study of 300 hours of these three different types of
engines working with three different types of fuel sources. Can
you give us an idea, did the test go any further to show that
if I run these fuels for such a period of time and the engine
does make it how much it's going to cost me to correct the
engine problems, how much it's going to cost me to fix it over
the life of the engine, those types of things? And whenever you
buy a car, it'll give you that little number there that says
the cost to run this car for a year and whatever that might be,
$1,200 or something like that. Did you do any further testing
on the engines?
Mr. Reid. Well, with the engine that did survive the E15
study, the 99 horsepower, we did complete emissions and testing
on that, performance testing. It did deteriorate from an
emissions standpoint. So that testing was done. We did not look
at the economics of--necessarily in depth of what it would cost
to run that fuel versus a different fuel, add in repairs at the
end, or purchasing a new engine. But I can tell you that the
other two engines that had failed, catastrophically failed
would have been a brand new engine. It would have been
thousands of dollars to replace at that point in time.
Mr. Knight. Okay. So safe to say that I would be getting
less hours or less MPG--I guess it would be hours on a boat----
Mr. Reid. Yes.
Mr. Knight. --engine and it would cost me more because I
would have to repair the engine?
Mr. Reid. In the end, yes.
Mr. Knight. Okay. Mr. Red, can you give me an idea on how--
what the Navy is feeling about the new drop-in fuel?
Mr. Red. I think the Navy is excited about it. Secretary
Mabus for the last several years has said, you know, 50 percent
is great but I'm looking for 100 percent replacement. They're
looking for it from a strategic energy security point of view.
If they're cut off from petroleum fuels, then they have no
ability to fight a war. And if a fuel requires blending with
petroleum and you're cut off from petroleum, you know, you
still can't use it. So I think that they've wanted the option
of being able to blend at any rate they want to and that's why,
you know, they're choosing to look at our fuel.
The performance is important, too. If you get a performance
boost with our fuel on a combat radius on an F-18 that
otherwise is kind of combat limited, not like a Tomcat that had
a lot of fuel, an F-18 is kind of limited on fuel so the Navy
needs as much combat radius, needs as much miles in that F-18
tank of fuel as they can get. So they're looking for fuels that
are efficient. But, you know, I think that's the two reasons
they're looking for it is, one, energy security. You know, this
can be, you know, in plants built around the world. We're
looking at a lot of licensees in a lot of places around the
world where the Navy operates that can build these plants and
other places and so the Navy wants to be able to buy these
fuels in different places and, you know, blend them at any
rate.
Mr. Knight. Okay. And are the other services looking at
this, too?
Mr. Red. The Navy is the lead dog on renewable fuels. The
Air Force did a lot of work through--you know, for over the
last seven or eight years but right now the Navy is leading the
charge on renewable fuels and the Army and the Air Force are
taking their results and looking at what they're going to do
with those fuels. The Army is buying about 3,000 gallons of our
fuel to test alongside looking at the Navy results and are
going to use our fuel as well.
Mr. Knight. Okay.
Mr. Red. So they're pretty much taking those results and
are going to look at certifying it for their platforms.
Mr. Knight. Very good. Thank you, Mr. Chair. I yield back.
Chairman Weber. Thank you, Mr. Knight.
Mr. Lipinski, you're recognized for five minutes.
Mr. Lipinski. Thank you, Mr. Chairman.
We're at an interesting point in the development of ethanol
capacity where second generation of ethanol plants using--
cellulosic feedstock are starting to come online. I think it's
a real exciting development as it demonstrates the successful
technological development that can reduce our dependence on
corn feedstock for fuel, can make beneficial economic use out
of what was formerly corn and agricultural waste and even trash
and can develop fuel with even less environmental consequences
than corn ethanol. Other advanced biofuels are also starting to
come online and hold promise, so I think this is something we
should all be celebrating.
However, we only have three such plants online right now.
They're seeking financial commitments for future development
depends on smart RFS policy and market signals that encourage
investment.
Dr. Hill, in your testimony you note the potential
environmental benefits of cellulosic ethanol over corn ethanol,
as well as gasoline. So we'll start with Dr. Hill. Anyone else
can join in here. How do you think we arrive at a point where
more second generation capacity can be invested in and
developed, moving us beyond corn ethanol and how do you see
cellulosic ethanol and other advanced biofuels competitively
moving ahead if the current RFS is held up?
Mr. Hill. So RFS to date has largely been satisfied by corn
and soy, and to move to next-generation sources we need to look
not only at RFS and of course very strong market signals that
it can provide, but we even need to look into ag policy. You
know, it'd be interesting to talk about that at some point. And
we right now have very strong signals and support for the
growth of annual row crops, corn and soy, such as subsidies for
insurance. No such subsidies exist for many of these second-
generation fuel feedstocks such as cellulosic sources like
switchgrass, miscanthus and others that could produce fuels
potentially better than our current conventional fuels. So one
thing that would need to be largely changed would be to provide
that sort of incentive to farmers to switch away from annual
row crops to perennial crops that can provide much better
lifecycle benefits than first-generation fuels.
Mr. Lipinski. Anyone else have anything? If not, I'll move
on to Mr. Reid. Now, I understand the--as you discuss the
challenges of using certain ethanol blends in smaller engines
such as boats and motorcycles. However, it's my understanding
that most everywhere that any ethanol blend is sold is also--
there will also be E10 fuels available that are not injurious
to boat or other small engines. So I'm trying to understand the
marine industry's concerns about ethanol and RFS is safe
gasoline options are widely available. Am I wrong that E10 is
widely available or are there marinas or gas stations that are
selling--only selling E15 or above blends? Can you explain more
your concerns about safe fuel availability?
Mr. Reid. It really comes down to if the consumers are
given choices at the pump, with many pumps not clearly
identified, our concern is that, and the data shows, that if
they do run E15, it will be detrimental to their engine life,
in addition to their boat fuel systems. So it's really outside
my wheelhouse of talking about the market and how to ensure
that they don't do this, but the effects if they do have a
mistake are very detrimental.
Mr. Lipinski. So might this be more of an education issue
rather than a matter of the RFS?
Mr. Reid. I believe the National Marine Manufacturers
Association would be better prepared to discuss that and they
could provide you information on that. That's really not my
expertise.
Mr. Lipinski. Okay. It just seems to me that it's not a
situation where it's not available; it's that mistakes could be
made in using the wrong fuel. And I understand the problems
that that causes, but I think that maybe that's more of the
issue, education, making clearer at the pumps what is available
there, what everything is rather than the RFS. Thank you very
much. I'll yield back.
Chairman Weber. Thank you, Mr. Lipinski.
Bill Posey out of Florida is recognized for five minutes.
Mr. Posey. Thank you, Mr. Chairman. And thank you for
holding this hearing and bringing these great witnesses in
here. And I hope if we have any more, we also might have
representatives from some organizations that represent
literally the concerns of millions of other Americans. And I'm
talking about SEMA, the Specialty Equipment Marketing
Association; the AMA, the American Motorcycle Association; the
Antique Automobile Club of America; and many other groups that
have had their members suffer since the introduction of corn
into their gas tanks.
I'd like to ask each member of the panel just their
opinion, yes or no if you could, if you agree with this
statement: ``The greater the amount of ethanol added to
gasoline, the less efficient the gasoline is.''
Mr. Smorch. As I said earlier, as you add more ethanol into
gasoline, the energy content does decrease.
Mr. Posey. So that's a yes?
Mr. Smorch. So yes.
Mr. Posey. Yeah. We--one word.
Mr. Hill. I cannot do it in one word.
Mr. Posey. You can't--so you--all right. That's----
Mr. Hill. It may or may not affect fuel economy. It depends
on the technology that's used to----
Mr. Posey. I didn't talk about fuel economy. I talked about
efficiency.
Mr. Hill. Efficiency is a function of the fuel and the
technology----
Mr. Posey. Yes.
Mr. Hill. --that burns it.
Mr. Posey. Basically, the more corn you stick in gasoline,
the less efficient it is?
Mr. Hill. That is not necessarily so.
Mr. Posey. Okay. Next?
Mr. Red. I'm not qualified to answer that one. That's not
my expertise.
Mr. Reid. In the marine engines, yes.
Mr. Posey. Okay. Agree with this statement, yes or no,
there are more pollutants in the total lifecycle of ethanol
than gasoline?
Mr. Smorch. I'm not qualified to answer that one.
Mr. Hill. There are many pollutants. For the ones that
affect air quality and climate change, yes.
Mr. Red. That's not my expertise.
Mr. Reid. I'm not qualified to answer that question.
Mr. Posey. Okay. In your testimony, Mr. Reid, you outlined
the research conducted by Mercury Marine in partnership with
the National Renewable Energy Lab. Can you summarize the
conclusions of that research on the impact of broad use of E15?
Mr. Reid. Broad use of E15 will be detrimental to our
customers' engines from the standpoint of, as I showed in the
pictures, long-term durability issues. We showed increased
temperatures in addition to compatibility issues with the fuel
system. That could lead to leaks in addition to the boat. And
the key thing there is our legacy fleet is 40 years old. Some
of those fuels were designed and developed on leaded fuel, some
of those engines. So we could see that they're going to be
highly challenged by going to higher ethanol blends.
Mr. Posey. And destroy the seals in every carburetor.
Mr. Reid. Their incapability, we will find those, yes.
Mr. Posey. Okay. What were the impacts of E15 on
durability, emissions, and run quality, bottom line?
Mr. Reid. It was deteriorated. They were worse with the E15
than E0 gasoline.
Mr. Posey. Okay. And what is the impact of midlevel ethanol
blends on marine engine performance?
Mr. Reid. Could you define midlevel?
Mr. Posey. Yeah.
Mr. Reid. E10 plus?
Mr. Posey. Yes, E10 plus.
Mr. Reid. E10 plus will be similar results to our E15.
It'll just be accelerated. The failures will occur faster if
it's above E15 than what was shown in our study.
Mr. Posey. Okay. And any thoughts about the human safety,
environmental, and technological concerns associated with
ethanol blends over ten percent in recreational boat fuel tanks
and engines?
Mr. Reid. I think the key thing is when you get stranded
out on open water, be it a very large lake or the ocean, there
is no tow truck that can come get you. It's a challenge and
it's fearful. That's why our boating community has twins or at
least two engines on the back of their boat, redundant systems
similar to an airplane, so when they do go offshore, they can
get back. So our concerns would be around people getting
stranded and that potential risk, in addition to, as I outlined
in my testimony, older fuel system in the boats were not
certified for anything above E10.
Mr. Posey. Okay. And what are the potential impacts of
widespread sales of E15 on the boating industry?
Mr. Reid. From the standpoint the data supports that the
engines will be at risk from a durability standpoint. I can't
tell you if those people that lose engines, that their engines
fail are going to turn around and buy new products or they're
going to get out of boating. One thing about boating is that it
can be challenging at times to get to the water and enjoy the
day, and we certainly don't want our consumers turning around
say that's not right; that's not where I want to spend my time;
I'm going to go elsewhere.
So we work very hard in the marine industry to make boating
very easy. We add additional technologies. We're required to
help the boater out to have an enjoyable day so that when
they're on the water with their family, it turns out to be an
excellent day.
Mr. Posey. Thank you.
Chairman Weber. I thank the gentleman.
With Mr. Perlmutter's permission, we're going to go for a
second round to violate these witness' rights.
Mr. Perlmutter. This is not right.
Chairman Weber. The Chair now recognizes Mr. Grayson from
Florida.
Mr. Grayson. You have the right to remain silent. Anything
that you say can and will be used against you. I'm talking to
you, Dr. Hill.
Dr. Hill, has the renewable fuel standard increased or
decreased carbon dioxide emissions?
Mr. Hill. The renewable fuel standard has increased net
greenhouse gas emissions.
Mr. Grayson. Increased on a lifecycle basis?
Mr. Hill. Yes, it has.
Mr. Grayson. But not on a sort of spot basis if you will,
not in terms of what's coming out of the tailpipe?
Mr. Hill. In terms of the--you can't look just in terms of
the tailpipe in terms of the impact of those fuels.
Mr. Grayson. Well, you could; you just don't want to.
Mr. Hill. You could.
Mr. Grayson. Let's be honest.
Mr. Hill. You would be missing the point.
Mr. Grayson. All right. And this conclusion that you've
reached, that refers only to corn-based ethanol, correct?
Mr. Hill. Actually, it's a bigger problem than that. So
some recent work has come out that has looked at the fuel
market rebound effect of these fuels. And so when you add more
fuels into the system, essentially you mandate the addition of
production of renewable fuels, you increase overall fuel use.
And the lastest work that has come out has shown that using--
producing an additional gallon of biofuel only reduces use of
conventional fuels by about half-a-gallon. So you have to be
much better off in terms of net greenhouse gas emissions to
reduce overall greenhouse gas emissions. In fact, you have to
be 50 percent better as a renewable fuel than gasoline to even
break even in terms of net greenhouse gas emissions.
Mr. Grayson. All right. But the studies that you've done
personally, they're based upon corn-based ethanol, correct?
Mr. Hill. We've done corn ethanol, we've done cellulosic
ethanol from switchgrass, from stover, from many other
feedstocks as well.
Mr. Grayson. Have you done sugarcane?
Mr. Hill. We have not done sugarcane.
Mr. Grayson. All right. What about the fuel that Mr. Red
referred to? You haven't done anything on that, right?
Mr. Hill. He has a drop-in fuel, and the conversion process
is very efficient but it requires feedstocks. It requires some
sort of oil feedstock. And he can speak more about the
requirements for those feedstocks. And as I described in my
testimony, many of the impacts occur in the production of the
feedstocks, not in the conversion or even the tailpipe. And so
what the net greenhouse gas impacts of his fuels will depend
largely on what happens in producing those feedstocks, as well
as the fuel market rebound effects in terms of consumer use of
these fuels.
Mr. Grayson. And Mr. Red also referred to the possibility
of algae-based ethanol and so on. You've done no studies on
algae-based ethanol, have you?
Mr. Hill. Actually, we have. We published a major study in
Environmental Science and Technology last--I believe it was
last September where we looked at algal feedstocks from a
number of different sources using a number of different
technologies evaluated over a number of different environmental
impacts. And we showed that the only way that you'll have algal
feedstocks that will be better than current fuel options is
when you tie them to wastewater treatment processes. You
essentially can clean up the water at the same time as you're
producing algal fuels. Now, they may be incredibly expensive to
produce but they could potentially be better if done in the
right way.
Mr. Grayson. In general, all that we've been discussing,
all these different options, they could be done in the right
way, right? There's no natural barrier to having a biofuel that
is--that produces less greenhouse gases than the alternative,
which is fossil fuels, right?
Mr. Hill. You can do it but it may be incredibly expensive
and your dollar may be much better spent if you're looking to
reduce environmental impacts, as we all are, to go for
efficiency or conservation or simply pay people to drive less.
That would be a better option than some of these fuels.
Mr. Grayson. Mr. Red, give us some idea of the future of
ethanol as you see it. How will ethanol be produced five years
from now, ten years from now, 20 years from now? How will it be
produced? From what?
Mr. Red. The future of ethanol or----
Mr. Grayson. Yeah.
Mr. Red. --other alternative fuels?
Mr. Grayson. Well, let's start with ethanol.
Mr. Red. I think, you know, there are several ways of doing
it. They do it from algae. There are algal processes that
produce ethanol. There's cellulosic technology and they're
commercialized and they're doing it cellulosically from
different cellulosic feedstocks. And then there's traditional
corn that I think will be around for a while due to the
political nature of this country.
Mr. Grayson. And what about alternative fuels more
generally for transportation purposes only because that's what
we're talking about today?
Mr. Red. The other alternative fuels?
Mr. Grayson. Yes.
Mr. Red. I think there's been a big shift towards how can
we take waste feedstocks that are not used efficiently now, how
can we turn those into great fuels? Brown grease, it's land-
applied. It's--goes into landfills, it goes into water
treatment. It's a--you know, people are trying to get rid of
it. If we can take that and turn that into 100 percent drop-in
diesel and jet fuel, that's a big win. Taking used cooking oil
and turning that--you know, there are lots of different
feedstocks out there that we can turn into, so it's a matter of
finding these different streams of feedstocks and turning them
into--efficiently into 100 percent drop-in fuels for us.
But we're not the only ones. You know, ARA and Chevron
Lummus Global are doing it but Shell Environs are doing it.
There are a bunch of other second-generation companies that are
based on the RFS and the supports of the RFS going out there
and introducing new technologies to take different feedstocks
and efficiently turn them in--and it's all based on the
efficiency, the greenhouse gas emissions and reductions in
greenhouse gas emissions. You know, nobody's going to--nobody's
going after first-generation, you know, 10 or 20 percent better
than petroleum. Most--or if what he's saying is right, you
know, a negative, most everybody's going after a 50 to 80, 90
percent reduction in greenhouse gas emissions. That's what
second generation is looking for.
Mr. Grayson. Thank you.
Chairman Weber. I thank the gentleman for yielding back.
And the Chair recognizes himself. Mr. Red, y'all produced
jet fuel for the Navy and you may be interested to know that in
our district there in Texas on the Gulf Coast my district
produces 60 percent of the nation's jet fuel, obviously from a
bit more traditional sources. When was--what's your cost as
compared to regular what we would say conventional jet fuel?
Mr. Red. On a commercial scale we're going to be very
competitive and 80 percent of it is going to be the cost of the
feedstock. If you start with a brown grease, you're at 10 cents
a pound, 80 cents a gallon. That's pretty competitive going
against, you know, petroleum even below 50 bucks a barrel. So
if 80 percent of our cost is feedstocks, commercially we're
going to be very competitive. Our conversion technology is
competitive with petroleum refining.
Chairman Weber. All right. Let's put that into dollars and
cents for us laypeople. So if a gallon of jet fuel is three
bucks, what's you all's cost?
Mr. Red. At commercial scale with waste feedstocks, it'll
be cost-competitive. It'll be right there at the cost of
petroleum----
Chairman Weber. So that's your aim but that's somewhere
down the road quite a ways yet?
Mr. Red. Certainly. Certainly.
Chairman Weber. Okay.
Mr. Red. That's at commercial scale.
Chairman Weber. Okay. Let's go back to algae. Algal
biofuel, when I was in the Texas Legislature I was on the
Environmental Reg Committee and a member of the Energy Council,
was 11 energy-producing States, four Canadian provinces, and
that other country Venezuela, and we met around the country.
And we'd had discussions about best energy practices and
legislation and so on and so forth. We were talking about
algal--we had somebody come in and talk to us about algal fuel,
and the Canadian Minister of Energy--I think I've got his title
correct--said it would never work in Canada.
And, Mr. Smorch, you kind of refer to the cold part of the
year here because in Canada the weather was so severe most of
the time that they couldn't grow enough algae for it to be
cost-efficient. So they hadn't figured out how to grow enough
of it because of the climate, and somebody popped up in the
back and said if you'll make it illegal, the marijuana growers
will figure out how to grow it.
But, Mr. Smorch, you actually mentioned this as being part
of--in your testimony that even in your district--in your area
I should say, how many months was it unrealistic to use the 15
percent or was it the 85 percent?
Mr. Smorch. No. It was actually biodiesel.
Chairman Weber. Right. Oh, the biodiesel.
Mr. Smorch. And--yeah, it was in the biodiesel and it was
in my written testimony. It was that just the way biodiesel is,
it'll start gelling at 35 degrees Fahrenheit.
Chairman Weber. So that's a pretty substantial----
Mr. Smorch. Right. So----
Chairman Weber. --portion or your winter.
Mr. Smorch. So our members will not buy biodiesel from
November through the middle of March, April 1st. They just
won't--they won't buy it in their diesel fuel.
Chairman Weber. Wow. Okay. Continuing with you, Mr. Smorch,
the EPA has indicated that the sale of E0 will eventually cease
as refiners work to comply with the RFS. Now, your website,
CountryMark's website shows that you have 16 stations currently
offering E0 within a 100-mile radius of Indianapolis. So if the
refining of E0 eventually ceases, what does that do to those
operations?
Mr. Smorch. I know that the EPA probably says that E0 has
to go to nothing but I think in our marketplace where it's
available, the customer is going to demand that E0 is there.
And so we'll--we will continue to supply it to our members.
Chairman Weber. Okay. Let's jump over to you, Mr. Reid. I
told you my dad had a gas station. He had boat sheds and I've
seen those Evinrudes. I know that's a bad term--bad word around
y'all, Mercury's and others, where they would fill up their
boats and they'd go out. And y'all may know this and you may
not. So you tested your engines for 300 hours on your boat
motors. What is the average boater--I'm assuming they use their
boat on the weekends. Do you have an hour number? Are they
out--do they run that motor five hours a weekend, ten hours a
weekend?
Mr. Reid. It's typically that an average customer in the
United States will run their boat less than 50 hours a year.
But the key thing there is that same boat engine will also go
to government sales, it'll go to taxi fleets----
Chairman Weber. Sure.
Mr. Reid. --so our distribution of hours per year is
profound.
Chairman Weber. Fifty hours a year, typical customer, okay.
Dr. Hill, you keep talking about switchgrass and this kind
of is interesting to me. There's talk about cellulosic and that
would be the grass and the yard clippings and so on and so
forth. Switchgrass is not just a--is that the grass you just
growing up along the highways? What is switchgrass?
Mr. Hill. You do in some areas. So switchgrass is a native
perennial grass to much of the Midwest and eastern United
States.
Chairman Weber. Okay.
Mr. Hill. You'll see it in common prairie----
Chairman Weber. Is it the same type of prairie grass--my
dad also was in the hay business before he started his gas
station business. Is it the same kind of prairie grass that we
bale and feed the cattle?
Mr. Hill. It may have been. It depends on where your farm
was. But switchgrass is one of the major components of the
typical American prairie, a big blue stem, little blue stem,
switchgrass and others. So it is a native plant and there's
been a lot of interest in using it as a feedstock. I'm involved
with a group called CenUSA. It's a $25 million grant from the
USDA specifically to look at the production of fuels from
switchgrass.
Chairman Weber. So in that instance you would say that
those hay balers who make hay now for stock, whether it's
horses or cattle or whatever, in some instances may change from
baling hay to supply the cattle industry as it were to now the
fuel industry if that becomes a widespread practice?
Mr. Hill. It's really no different. We've baled hay for
many, many years, many, many centuries, if not millennia, and
so using what we've learned in that production for biofuels has
a lot of potential. You can produce switchgrass in ways that's
better and you can produce it in ways that's worse.
Chairman Weber. Okay.
Mr. Hill. You have to look at those practices that actually
lead to good environmental benefits.
Chairman Weber. Okay. Well, I appreciate that. And, Mr.
Grayson?
Mr. Grayson. No further questions.
Chairman Weber. No further questions for the witnesses,
Your Honor. Okay.
Well, listen, we certainly thank you all for coming today
to testify. And this concludes--actually, what I want to say is
the record will remain open for two weeks for additional
comments and written questions from the Members.
So this hearing is adjourned.
[Whereupon, at 11:43 a.m., the Subcommittees were
adjourned.]
Appendix I
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Answers to Post-Hearing Questions
Answers to Post-Hearing Questions
Responses by Dr. Jason Hill
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Appendix II
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Additional Material for the Record
Prepared statement of Committee Ranking Member
Eddie Bernice Johsnon
Thank you Mr. Chairman and thank you to the witnesses for being
here today. While I certainly appreciate your testimony, I must note
that the panel today is not fully representative of the views on this
topic. The Renewable Fuel Standard, or RFS, is a major policy enacted
by Congress with complex implications for many businesses, the
environment, and the economy as a whole.
Most importantly, we will not be hearing from either the EPA, the
agency responsible for implementing the standard, or the Department of
Energy, the lead agency for the federal government that conducts
research into advanced biofuels.
There are real concerns about how the the RFS is being implemented,
and we will need to hear from both EPA and DOE if we are to fulfill our
oversight responsibilities.
It is fair to say that EPA has failed to implement the RFS for 2014
and 2015 in a timely fashion. This delay is due, in part, to the more
than 300 thousand comments received on its original proposal in
November 2013. According to EPA, these comments represented divergent
views on a variety of topics such as the so-called ``blendwall,'' the
extent to which it should use its waiver authorities, and the intent of
Congress.
While I am not condoning the delay, I do understand the need to
evaluate these comments, and it underscores the importance of hearing
from EPA on this topic.
While there may be differing views on how best to implement the
RFS, it is clear to me that this policy is an important tool for
reducing our dependence on fossil fuels, reducing our nation's
greenhouse gas emissions, and encouraging innovation that is leading to
the development of advanced, more sustainable alternative fuels.
In fact, on Monday, 36 Senators of both parties from 24 states sent
a letter to Administrator McCarthy urging her to increase EPA's
advanced biodiesel volume requirements for 2016 and 2017 to better
reflect the state of a growing domestic biodiesel industry.
Mr. Chairman, the Renewable Fuel Standard is a complicated issue,
and I hope that this hearing today is not the end of our discussions on
this matter.
With that I yield back.
Prepared statement of Subcommittee on Oversight
Ranking Minority Member Don Beyer
Thank you Chairmen Weber and Loudermilk for holding today's hearing
and thank you to the witnesses for testifying.
The greatest challenge of this generation--climate change--requires
innovative solutions if we ever hope to make a meaningful difference.
It requires us to look at every aspect of our energy production and
consumption. We must find ways to end our dependence on fossil fuels
and reduce our greenhouse gas emissions.
The Renewable Fuel Standard has helped to push the technological
limits and the capacity of industry to innovate our transportation
fuels. In the past ten years we have seen increasing production of
biofuels from both corn ethanol and advanced biofuels. This increase
has come with considerable advancements in how corn ethanol is
produced, improving production efficiencies while decreasing both costs
and greenhouse gas emissions.
While there is much more to be done, I am hopeful for the potential
in advanced biofuels. The Renewable Fuel Standard was designed to
integrate all biofuels into our fuel supply and lay the groundwork for
the growth and development of advanced biofuels with at least a 50%
reduction in greenhouse gas emissions compared to that of conventional
gasoline. I am interested in hearing more about the advancements in
this area and where we can expect biofuels to be in the next ten years.
All of this does not go without saying that there have been
challenges. The Environmental Protection Agency recently issued
volumetric requirements for 2014, 2015, and 2016, after missing the
statutory deadline two years in a row. While inundated with public
comments during the proposal process, it does not excuse this lengthy
delay. The agency has issued waivers for the required cellulosic
biofuels and plans to do so again. I hope the proposed volumetric
obligations can be finalized by the November 30th deadline.
With a wide ranging body of research looking at every aspect of
production and a range of stakeholders that have advocated for almost
every different scenario available, we as lawmakers are left with
difficult decisions to make. I hope we can continue to educate
ourselves with additional hearings in order to inform our decisions on
America's energy future. In particular, I look forward to hearing from
DOE and EPA on this topic.
Thank you Mr. Chairman.
Prepared statement of Representative Zoe Lofgren
On Thursday, July 23, the Committee on Science, Space, and
Technology Subcommittees on Energy and Oversight held a joint hearing
titled, ``The EPA Renewable Fuel Standard Mandate'' to discuss the
economic and environmental impacts of the Renewable Fuel Standard
(RFS). While I was unable to attend this hearing, it is important to
examine the role renewable transportation fuels can play in addressing
climate change and reducing our dependence on foreign oil.
The changing climate and our response to it are among the most
important issues facing us today. I have long been a proponent of
developing and deploying renewable energy sources. We cannot continue
to rely on conventional liquid fuels because such dependency poses a
risk to both our environment and our national security.
Commercializing new technologies is not easy or fast, but long-term
policies like the RFS have been a critical driver in the accelerated
development of second-generation biofuels. Low-carbon, second-
generation advanced and cellulosic biofuels, and biomass-based diesel
can provide cleaner, greener transportation fuel, and an alternative to
more land use intensive forms of corn-based ethanol. In California,
investing in advanced biofuels is vital for us to meet our long-term
goals of a cleaner and domestically fueled transportation fleet.
It is unfortunate that the Science Committee held an oversight
hearing without seeking input from the administering agency on the
potential challenges and opportunities for improving the RFS. As the
Environmental Protection Agency finalizes its RFS standards for 2014-
2016, and as the Administration looks to secure an international
agreement to address climate change, we must ensure that this policy is
implemented in a way that provides certainty, supports continued
investment in a burgeoning alternative fuels industry, and protects our
economic and environmental interests.
Documents submitted by Representative Loudermilk
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Documents submitted by Representative Grayson
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